CNCA Guide: Canada Not-for-profit Corporations Act Explained

Every federally incorporated nonprofit and most federally incorporated charities in Canada live under one statute: the Canada Not-for-profit Corporations Act, usually shortened to the CNCA or the NFP Act. It decides how many directors you need, when you must hold a members' meeting, what level of financial review your statements require and what Corporations Canada expects every year. Most of the compliance problems we see in federal corporations come from a board that never read past the certificate of incorporation.

What the CNCA Is and Who It Governs

The CNCA came into force on October 17, 2011 and replaced Part II of the old Canada Corporations Act. It is administered by Corporations Canada, which issues certificates, keeps the public record and can dissolve corporations that stop filing.

The Act governs the corporation, not the charity. A federal charity is two legal things at once: a corporation under the CNCA, and a registered charity supervised by the Canada Revenue Agency. Satisfying one regulator does nothing for the other.

Incorporation is as of right: articles of incorporation (Form 4001) and the $200 online fee produce a certificate without any review of the purposes. A separate Nuans report is no longer needed to incorporate online with a word name, because Corporations Canada now runs the corporate name search as part of the incorporation process. That is the incorporation step; the rest of this page covers what happens after.

Soliciting or Non-Soliciting: The Distinction That Drives Everything

The CNCA sorts corporations into two categories, and almost every other rule in the Act depends on which one you are in.

A corporation is soliciting if it received more than $10,000 in a single financial year from public sources: donations from people who are not members, directors, officers or employees (or their relatives), government grants, or funds from another corporation that itself received public money. Once crossed, the status runs from the next annual meeting for three years, even if income drops.

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Directors, Members and Meetings

Directors must be individuals, at least 18, not bankrupt, and elected by the members. There is no Canadian residency requirement, terms cannot exceed four years, and the articles can let the board appoint additional directors between annual meetings, up to one-third of the number elected at the last one.

Members belong to the classes set out in the articles. An annual meeting must be held within 15 months of the previous one and no later than six months after the financial year end, on 21 to 60 days' notice. A special resolution needs two-thirds of the votes cast.

Financial Statements and the Public Accountant

Financial statements must be prepared for each financial year and sent to members between 21 and 60 days before the annual meeting. Where the bylaws allow it, the corporation can instead notify members that the statements are available at the registered office and that any member may ask for a free copy. The level of review depends on the corporation's category and gross annual revenue. A soliciting corporation at or below $50,000 can resolve unanimously not to appoint a public accountant at all. Between $50,000 and $250,000 the default is a full audit, and members have to pass a special resolution if they want a review engagement instead. Above $250,000 an audit is mandatory and cannot be waived. A corporation that assumes it only needs a review, and discovers at year end that the default was an audit, has no way to fix that retroactively.

Annual Filings With Corporations Canada

The annual return keeps a federal corporation alive. It is due within 60 days of the anniversary of incorporation every year, whether or not the corporation did anything, and costs $12 online or $40 by any other method. It is not the CRA's T3010. Corporations Canada dissolves corporations that fall behind, typically after three years in default. Our checklist of annual obligations under the CNCA lays the calendar out in full.

Three other filings catch boards by surprise: changes of directors within 15 days (Form 4006), changes of registered office address (Form 4003), and bylaws or bylaw amendments within 12 months of members confirming them. A federal corporation that operates in Ontario still files an initial return with the province; our post on the required government filings for an Ontario nonprofit covers that side.

Fundamental Changes: Amendment, Continuance, Amalgamation and Dissolution

Amending the articles needs a special resolution and articles of amendment (Form 4004, $200 online). Continuance moves a corporation into or out of the federal jurisdiction, amalgamation combines two or more CNCA corporations, and voluntary dissolution winds one up on the members' resolution.

Two further tools sit outside that list. When a corporation has been dissolved and needs to come back, the route is Form 4015, Articles of Revival. When a change is too complex for the ordinary provisions and needs court approval, the route is Form 4014, Articles of Arrangement. All of the forms mentioned on this page are collected on our charity and non-profit forms and statutes page.

If your federal nonprofit or charity has fallen behind on any of these obligations, our charity lawyers can review the corporate record and bring it current. Call us at 416-488-5888, email us at ask@charitylawgroup.ca, or schedule a free meeting with our legal team.

Frequently Asked Questions

Here are answers to the questions we hear most often about the CNCA.

Does the CNCA apply to Ontario nonprofits?

No. Ontario nonprofits are governed by the Not-for-Profit Corporations Act, 2010 (ONCA). The CNCA applies only to corporations incorporated or continued federally. A federal corporation operating in Ontario answers to the CNCA for its corporate governance and to Ontario for extra-provincial registration.

What happens if we do not file the annual return?

Corporations Canada can administratively dissolve the corporation. A dissolved corporation ceases to exist, and if it was a registered charity the CRA will revoke the registration because the entity it registered is gone. Revival is possible but it is far cheaper to file the $12 return.

Can we change our purposes after incorporation?

Yes, by special resolution of members and articles of amendment. If the corporation is a registered charity, note that the Charities Directorate no longer pre-approves changes to a charity's purposes or activities. The charity is responsible for satisfying itself that the new purposes are charitable at law, adopting the amendment under its governing documents and the applicable statute, and then sending the CRA its updated certified governing documents and revised statement of activities. In Ontario the Public Guardian and Trustee also has a role where a charity amends its articles.

This article provides general information about the Canada Not-for-profit Corporations Act and is not legal advice. Speak with a charity lawyer about your organization's specific circumstances.

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